Major mainland stock indices closed up more than 5 per cent yesterday, with the Shanghai market clawing its way out of bear-market territory, as investors showed renewed confidence following a slew of supportive measures from Beijing. The mainland markets experienced another intense rollercoaster ride, recovering from steep falls in the morning session, when there were some signs of panic selling, to rally strongly in the afternoon. The key Shanghai Composite Index dropped as much as 5.1 per cent at one stage yesterday morning, before finishing up 5.53 per cent to close at 4,277.22. The Shenzhen Composite Index jumped 4.8 per cent to close at 2,464.23. The ChiNext board in Shenzhen rallied 6.28 per cent to 2,858.61, after dropping more than 7 per cent at one stage in the morning. The Shanghai Composite Index remained the best performing major equity index in the world in the first half of the year despite a sharp correction since mid-June, outshining the rest with a 35.1 per cent gain. That compares with an 11.7 per cent gain for Hong Kong's Hang Seng Index in the first half and a 16 per cent gain for Japan's Nikkei. America's Dow Jones Industrial Average had lost 2.2 per cent this year by the close of trade on Monday and the S&P 500 had shed 1.1 per cent. "The actions from the authorities to stabilise the equity market seem to be starting to work," said Gerry Alfonso, a director at Shenwan Hongyuan Securities in Shanghai. Mainland stocks bounced back after the state-owned pension fund said late on Monday it would aim to invest 30 per cent of its assets in the domestic stock market, a move that could provide a 1.3 trillion yuan (HK$1.6 billion) boost for equities. Separately, the Asset Management Association of China said on its website that buying opportunities were emerging after the Shanghai market dropped into bear-market territory on Monday following a sharp sell-off that saw the index sink more than 20 per cent from its June 12 peak. The fall was partly fuelled by the closure of margin-trading positions built earlier by investors who had placed aggressively bullish bets. In Hong Kong, the Hang Seng Index closed up 1.1 per cent at 26,250 yesterday, with mainland financial stocks leading the gainers. Watch: China stocks slide despite easing boost
